I have been writing about the intersection of science and ambition for over 20 years. I am currently the Editor in Chief at Sandisk (disclosure: I write about computing architectures, but am rigorous about avoiding conflicts of interest.It's my promise to you.). I've also worked at Eastwick Communications, Greentech Media, CNET and CMP. My work has also been published in Forbes, the New York Times, National Geographic, Wired and other places and I speak somewhat regularly at conferences. I've visited the Orkney Islands to study wave power, filtered through reams of SEC documents, quizzed Elon Musk about EVs, and volunteered twice to be electrocuted. All for the sake of entertaining readers. One summer, I also gave out coupons for free nickels at a casino in Reno.

Where AMD Failed

AMD, the perennial second banana to Intel in microprocessors and memory products, is on the skids again. The company announced last week that it would trim 1,400 jobs or about 10 percent of its workforce.

Some people blame the shrinking PC market for the Sunnyvale, Calif.-based company’s woes. Others are blaming AMD’s failure to move into smart phones.

But this isn’t a sudden decline. AMD is 42 years old. Despite billions in revenue over the years, it has posted a cumulative net loss of over $2.5 billion over its history, factoring in acquisitions and charges. (See math below) Put another way, if you have $50 in the bank, you’ve might have a achieved greater career net profit.

The reason for the failure is simpler, and deeper than that.

AMD failed to believe in its people.

Let me explain. Founded in 1969 by Jerry Sanders, AMD has always teetered on the edge of extinction, in part because of its unusual business model. When Intel–founded the year before by Robert Noyce and Gordon Moore—began to sell memory products to large companies, the large companies in turn told Intel that they would buy its products only if Intel could guarantee a second source. No one wanted to risk delaying a new product because Intel had factory problems.

Intel chose AMD as its licensee. It was a deliberate choice, according to Valley old timers. AMD had engineers that could design and produce chips similar to Intel’s, but it lacked the money and technical depth to do it as well. AMD, in other words, could help Intel, but never fully challenge it.

The lopsided relationship continued when the microprocessor market came into being in the 70s and 80s. AMD would release a chip, gain ground, and then encounter a manufacturing or design glitch which led to a bloody price war that AMD would lose.

“AMD has one good year and three bad years. Intel has three good years and one bad year,” one analyst told me when I covered both companies.

Intel has ‘copy exactly’ as a manufacturing mantra. AMD has ‘somewhat similar,’ another said.

But occasionally, AMD would eke out a sustained victory because of a youthful injection of creativity. Sanders fostered that ambiance. Sanders was outlandish. He wore loud suits and spoke his mind. He was incredibly charming, kept houses in Malibu and San Francisco, and had Rod Stewart play at company parties years before garish corporate parties were fashionable along with losing lots and lots and lots of money.

But he also trusted people. In 1996, AMD bought a processor company called NextGen. He gathered employees and told that the fate of the company rested on NextGen. It worked. They team came up with the K6 family, which revived AMD.

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Hey you silly hack, if youre going to write a story you could at least get the facts right. You keep saying Athlon when what you meant was Opteron. Athlon was another win in its own right though but before K10 and Opteron. AMD stuck it to Intel and was producing Athlon processors superior to Intel’s PIII and P4.

However, and something you conveniently left out, Athlon is where Intel began to ILLEGALLY bribe and intimidate vendors to not sell AMD products, which continued very much so through the Opteron days. Maybe you should not conveniently dismiss facts like these.

Oh, sorry Athlon and AMD were outperforming Intel even back during PII. And AMD did have an Athlon server processor, I actually still own one, its the Athlon MP, however its nothing like the Opteron with the integrated memory controller and 64-bit instructions. So where yes, Athlon was a nice point to bring up, you described the Opteron and its new architecture (originally K8 and integrated memory controller for servers) which came much later than the first Athlons. Athlons also got the intergrated memory controller, but we are talking like 6 years after the first Athlon was out.

All of that fake Latin threw me off. Yes. Athlon came first. It was a fine chip. But Opteron broke the mold for servers.

The antitrust issues were definitely something, but you have to admit, manufacturing wasn’t always tip-top. That changed in the early part of the decade. But still, AMD needd a better follow on product

You should get your facts right. AMD is making profits, and the only thing saving Intel from losing more business is that AMD can’t produce the Fusion A8/C/other chips fast enough, which is changing as we speak. Otherwise Intel will have their current earnings significantly reduced because their mobile/laptops chips don’t compare to AMD’s chips (remember Intel’s Atom? it gave a bad name to cheap under-performing portable computers). AMD is already making money and their chip output is increasing, as we speak, and their chip demand is increasing, then besides one chip issue, I see AMD business coming back and Intel still to support Direct X11 and still to come up with decent high performance GPU’s, etc.

Don’t forget Intel’s Larrabee fiasco, Itanium fiasco, and their last chip flaw fiasco. Where to you mention that in your article..? Intel biased?

The first released versions of Bulldozer have some yield fabrication/software performance issues, and their design is oriented to multi-tasking not single threaded performance. Once the chip/software flaws are solved and once they are ran with benchmarks designed for treu multi-core/multi-threaded hardware, then we will begin to see the other side of Intel limitations.

I still waiting for an INTEL high performance GPU. A company that does not have a high performance GPU cannot be considered a full rounded CPU/APU competitor and can lose their entire business/edge in a couple of years.

AMD has high end GPU’s and Intel has failed and has problems trying to build one, and Intel’s low end GPU’s ran Direct X that are obsoleted (2009), and relies on people buying NVIDIA or AMD GPU’s to ran 2011/2010 Direct X11 based games and applications.

The more I write, the more I like AMD and where it is going. I like the new CEO and the new experienced VP’s he hired and if AMD goes ARM, them Intel can kiss goodbye to that business and AMD will not be only x86.

Not to forget that Intel did very good for many years because it bullied and paid other companies so that they will not buy AMD products. That’s why Intel lost several billion dollars in fines/settlements. Well now, Intel has to perform honestly and it has no high performance GPU’s and no high performance mobile.

Shrinking PC market? Where do you get your information? Excuse me, but the PC market is bigger than ever, especially amongst enthusiasts. Have you seen the PCs being built these days? Have you even looked at the gaming market? So the developers leave out the PC every couple games, cause they know PC users will just hack their games, but other than developers not having the PC as their favorite gaming system, the PC itself is more popular than ever. I think you best do some research and rethink your first statement in this article. Just cause all-in-ones and netbooks have increased in popularity, doesn’t mean there isn’t a healthy and growing number of people who’s computing needs and gaming needs can ONLY be met by the PC whether Intel or AMD is in the lead. AMD does take the lead once in a while. Remember the first x64 chips? Remember the first dual-core chips? Remember that a Black edition Athlon 64 X2 OC’d is still one of the best chips around and it’s almost 10 years old? Remember the first time cache was placed on a chip? AMD anyone? While Intel dumps money into improving their own designs, and stays at the top of their curve by being a monster in comparison to AMD, AMD always manages to innovate. I may be slightly disappointed in my FX 8-core, but when I crank it to 5Ghz nobody’s complaining!

Where do you get off saying AMD is behind Intel in memory? Cause Intel has great SSD’s? Which they do, but besides that, someone else was on here talking about Intel’s lack of offering in a high-end GPU, I seem to recall that AMD is pumping out video cards loaded with DDR5 memory, and Intel’s got what?